Online video company Tudou has seen its revenues hit 171.9 million yuan (US$27.1 million) in its second quarter financial earnings, due mainly to the spikes in online advertising and mobile video revenues. At the same time, rising cost of revenues and its impending merger with Chinese rival Youku has impacted its business margins.

On Sunday, the Chinese company reported a 47.3 percent jump in revenues to 171.9 million yuan for the second quarter ended June. This was an improvement over the 116.7 million yuan (US$18.4 million) generated during the same quarter in 2011, it noted.

Tudou said its revenue growth was driven mainly by online advertising services, which saw a 47.4 percent on-year jump to 150.7 million yuan (US$23.7 million). This was followed by mobile video services, which generated 16.7 million yuan (US$2.6 million), and sub-licensing revenue of 4.5 million yuan (US$700,000).

Rising costs, merger impact businessHowever, the company noted that increased costs in Internet bandwidth, content, and mobile video services had impacted its cost of revenues. The overall cost of revenues increased by 123.2 percent to 191 million yuan (US$30.1 million) from 85.6 million yuan (US$13.5 million) last year, it stated.

Its net loss also widened by almost double from 78.9 million yuan (US$12.4 million) in 2011 to 154.7 million yuan (US$24.4 million), the company added.

Meanwhile, the company's pending merger with Youku has also impacted its operating expenses. This figure has increased to 135.8 million yuan (US$21.4 million) for the quarter, with 23.7 million yuan (US$3.7 million) attributed to the deal. Additional hires and marketing expenses were the other main reasons for the increase, it noted.